Huge NJ Real Estate Tax Change Nobody Has Heard About

Quietly, the NJ legislator in conjunction with outgoing Governor Phil Murphy made monumental changes substantially increasing the taxes on certain real estate transactions in the state as part of the 2026 fiscal year budget. Press coverage has been minimal so we explain the new changes here.

In short, the 1% “mansion tax” that had been imposed on buyers for residential purchases in excess of $1,000,000.00 about two decades ago is gone. No, they didn’t lower taxes. Instead, they added new taxes known as the “Graduated Percent Fee” in addition to and on top of the already existing transfer fees paid by sellers. This is not tiered as income taxes are. The following percentages will be paid on the entirety of the consideration (i.e. the total purchase price).

$1 million+: The existing 1% “mansion tax” remains, but the responsibility shifts from the buyer to the seller, amending the 2004 law.
$2 million+: 2% tax on the seller.
$2.5 million+: 2.5% tax on the seller.
$3 million+: 3% tax on the seller.
$3.5 million and above+: 3.5% tax on the seller.

For reference, please check out this summary from the New Jersey Association of Realtors (who fought against these changes): https://www.njrealtor.com/government-affairs/realty-transfer-fee/

And as always, find links below for everything listed, put under contract, or sold in Sea Isle, Avalon & Stone Harbor, The Wildwoods, Ocean City, and Upper Township (includes Strathmere) below. To discuss anything real estate related or your plans to buy, sell, or rent, call us at 609-478-0333 or email [email protected].